US embassy cable - 04MAPUTO659

C O N F I D E N T I A L SECTION 01 OF 04 MAPUTO 000659 
 
SIPDIS 
COMUSNAVEUR FOR LT DOLAN, PLEASE PASS POLAD NAPLES 
STATE FOR AF/S AND AF/FO 
ACCRA PLEASE PASS TO VIP PARTY 
E.O. 12958: DECL: 05/14/2014 
TAGS: PREL, MARR, PTER, KCRM, MZ, EFIS, Scenesetters, Coastal Security, ACOTA 
SUBJECT: SCENESETTER FOR VISIT OF USCOMNAVEUR 
 
REF: USCOMNAVEUR LONDON UK 061924 MAY 04 
Classified By: Econ/Pol Officer Chris Jester for reasons 1.4 (b) and (d) 
 
1. (U) Introduction and summary. Your visit comes at a time 
when the positive bilateral relationship between the U.S. and 
Mozambique is expanding. Mozambique is the only country in 
the world that is both a focus country under the President's 
Emergency Plan for AIDS Relief and one of the sixteen 
candidates to receive funding under the Millennium Challenge 
Account. Following the announcement on May 6 that Mozambique 
was selected, planning has begun for a team to visit from 
Washington by the end of May to begin discussion on the MCA 
Compact with Mozambique. Your visit also closely follows the 
visit April 28-30 of the President's Global Coordination for 
HIV/AIDS, Ambassador Randall Tobias. 
 
2. (C) Last month the Ministry of Defense agreed to receive 
peacekeeping training under ACOTA and specifically requested 
that a contingent scheduled to replace their troops in 
Burundi be trained by December. The Interior Minister met 
with the Ambassador and emphasized their willingness to 
receive assistance in border security, noting the critical 
situation of Mozambique increasingly serving as a transit 
country for trafficking in narcotics, people, and other 
contraband, and conducive environment for international crime 
and terrorism. We have been working with the Mozambicans to 
try and build their capacity to receive EDA coastal patrol 
vessels, but have met with bureaucratic delays, specifically 
in their lack of progress drafting a model maritime code. 
End summary. 
 
POLITICAL/ECONOMIC OVERVIEW: 
============================ 
3. (U) Mozambique is rightly considered a post-conflict 
success story. Since the signing of the 1992 Peace Accords 
that ended sixteen years of civil war, Mozambique has made 
significant progress in promoting economic reforms and 
consolidating democracy. But Mozambique still faces enormous 
development challenges. The HIV/AIDS epidemic puts at risk 
much of the progress gained over the past decade and growing 
corruption hinders development and further foreign 
investment. US bilateral relations are strong. US 
government efforts in Mozambique have focused on good 
governance, economic development and health. The USG was also 
the major donor contributing to reconstruction and 
rehabilitation activities following the catastrophic floods 
in 2000. 
 
4. (U) In late 2004, Mozambique will hold its third 
multi-party presidential elections since independence in 
1975. The current constitutionally-elected president, 
Joaquim Chissano, will step down after having served eighteen 
year, including two elected terms. Chissano and the 
leadership of FRELIMO dominate policy-making and 
implementation. Mozambique currently holds the Presidency of 
the African Union (AU). President Chissano has been actively 
engaged on broader African issues and has sought to use his 
AU Presidency both to build stronger African institutions and 
to find African-led solutions to African problems. In 
February, Planning and Finance Minister Luisa Diogo replaced 
Pascoal Mocumbi as Prime Minister (while retaining the 
finance portfolio). On November 19, 2003, Mozambique held 
municipal elections which were considered generally free and 
fair. However, many institutions, such as the judiciary and 
the police, remain weak. Corruption remains a problem in both 
the public and private sectors. 
 
5. (U) Mozambique continues to be one of the most dynamic and 
fastest-growing economies in sub-Saharan Africa, albeit from 
a low base. Mozambique is one of the world's poorest 
countries, with per capita GDP of less than $250. That said, 
economic growth has averaged 8% over the last 3-4 years and a 
recent household survey indicates that the incidence of 
extreme poverty has declined from 70% to 55% over the past 
five years. Mozambique has significant but so far mostly 
untapped natural resources, including coal, natural gas, 
titanium ore, tantalite, graphite, iron ore, and 
semi-precious stones. One third of the economy is based on 
agriculture, most of it subsistence, but Mozambique exports 
cashews, cotton, sugar, sorghum, tea, citrus fruit, and 
tobacco. Mozambique has privatized over 1200 mostly smaller 
companies and 37 large enterprises since the privatization 
program began 10 years ago. Only 11 large state-owned or 
operated companies remain, including the national airline, 
telephone, electricity, insurance, oil and gas exploration, 
port and rail, airports, water supply, and fuel distribution 
companies. US-Mozambican trade, although quite small, is 
expanding, with the vast majority of Mozambique's exports to 
the US entering under either AGOA or GSP. South Africa and 
Portugal are the leading foreign investors. In 2003, 
Mozambique was assigned an international credit rating of B/B 
by Fitch Ratings, reflecting Mozambique's positive track 
record on economic reforms, political stability, strong 
economic growth, openness to FDI, and expanding exports. 
 
6. (U) Mozambique faces significant development challenges. 
The literacy rate is about 40 percent and infant mortality 
rates are among the highest in Africa. Life expectancy is 46 
and is expected to decline into the 30s by 2010 as a result 
of AIDS. The country also lacks infrastructure, power, and 
clean water for most of its citizens. The Government has 
placed its Plan for the Reduction of Absolute Poverty (PARPA) 
at the head of its policy agenda. PARPA emphasizes six areas 
as the key reducers of absolute poverty: education; health; 
basic infrastructure; agriculture and rural development; good 
governance; and macroeconomic and financial management. The 
donor community funds approximately 60 percent of the 
national budget, though the HIPC and Enhanced HIPC (Heavily 
Indebted Poor Countries) debt relief programs have permitted 
increased budgetary support to alleviate poverty. 
 
COUNTER TERRORISM ISSUES 
======================== 
7. (U) The GRM has acceded to all twelve UN 
Counter-Terrorism conventions. The USG has offered to assist 
the Mozambican MFA in preparations for hosting a 2004 
National Counter-Terrorism Conference in Maputo on 
implementation of UN Counter-Terrorism conventions. We have 
sent Ministry of Finance and Central Bank of Mozambique 
officials to USG training provided in Botswana. 
 
8. (C) Mozambique has no capacity to patrol its maritime 
border, with an unprotected coastline twice the length of 
California. We have sent eight Mozambican naval officers to 
the International Maritime Officers Course in Norfolk over 
the past five years. Four groups from DIILS in Newport to 
provide Mozambican Navy an international law course for MFA, 
MOD, Interior and Justice Ministries, with goal of 
establishing maritime patrol capacity (provision of EDA 
patrol craft and IMET crew training). Mozambique is 
addressing the need to establish a codified system of 
maritime law, as we seek to identify equipment and funding 
available through US programs. DOD also conducted a Maputo 
airport survey in 2003. 
 
9. (C) Officials from Customs, Police, Ministry of interior, 
Immigration, and Finance Ministry attended a USG 
Counterterrorism seminar in Gaborone, Botswana. DOJ has 
provided FBI training for prosecutors at Mozambique's 
Judicial Training Center including anti-money laundering 
components. Post will also seek State INL funding for 
equipment requested by Mozambican customs for container 
inspection in ports of Maputo, Beira, and Nacala. The 
Minister of Interior seeks US assistance in tackling problems 
faced by the GRM in trying to combat trans-border crime and 
the growing role of Mozambique as a transit country for 
narcotics, especially cocaine originating in Brazil destined 
for South Africa. 
 
10. (SBU) The Interior Minister would also welcome any 
assistance to improve GRM capacity to track money laundering. 
He noted the demographic factor of the large number of 
Muslim businesses in the northern provinces involved in 
importing goods for sale in Mozambique and the difficulty his 
ministry faces in knowing the real names of account holders 
and merchants bringing goods through customs. He also 
confirmed reports of large numbers of undocumented Pakistani 
aliens and the more recent trend of Somali refugees entering 
or transiting Mozambique. 
 
12. (SBU) In February, we hosted a Counterterrorism Action 
Group (CTAG) meeting with counterparts from Spain, Portugal, 
Russia, France, Italy, Switzerland, UK, Germany, European 
Commission, and Ireland (representing EU troika). 
Participants concurred that improved maritime security for 
Mozambique's vulnerable coastline was the top priority and 
agreed to coordinate the efforts of the USG, France, 
Portugal, and the EC to provide coastal patrol capacity. 
Other areas of mutual concern discussed include financial 
oversight, trafficking of drugs and people, money laundering, 
and corruption. CTAG participants indicated few direct 
programs; however, nearly all indicated programs to build 
government capacity in areas directly related to CT 
capabilities. 
 
BUILDING COASTAL PATROL CAPACITY 
================================ 
13. (C) The French see the coast as the key to 
counterterrorism efforts and are also addressing this 
specific vulnerability. They will provide two small patrol 
boats to the GRM in 2004, which are currently being refitted 
in Simonstown by the South African Navy. They plan joint 
naval exercises for later this year and had two GRM Navy 
personnel on their frigate during a January 2004 port visit 
to Maputo. Portugal is working with the GRM on developing 
the necessary maritime code, a prerequisite for our EDA 
request. They are optimistic that they have more success 
that we have seen after four DIILS visits. The British 
provide training in bank auditing and financial systems and 
are conducting a large project with Mozambican Customs 
implemented by Crown Agents. However, British concerns 
regarding counterterrorism have their focus on Kenya, 
Tanzania, and South Africa. 
 
14. (C) The European Commission provided some customs 
training to the GRM, but has focused on assisting GRM public 
sector reform, judicial reform, and increased budget 
accountability. They provide direct financial support to the 
Ministry of fisheries for monitoring the coastline (including 
funding surveillance flight hours). The have funded the 
chartering of a vessel from the South African Fisheries 
Ministry, through SADC,s Monitoring, Control, and 
Surveillance of Fisheries program (MCS). In April, two 
illegal Chinese fishing vessels were seized. The European 
Union provide approximately two million euros annually for 
assistance related to fisheries. Included in the program is 
technical support for development of a maritime code. 
Portugal, the driving force behind CPLP joint military 
exercises, emphasizes training for PKOs and staff command and 
control. They provide support to the GRM Military Academy in 
Nampula and are also assisting with development of the 
maritime code. 
 
15. The group recognized the need to coordinate our efforts 
to get the GRM to adopt a model maritime code and prepare 
themselves to utilize coastal patrol boats. All participants 
agreed that weak land borders, ineffective and corrupt police 
and judicial officials, absent coastal patrol capacity, and 
poor coordination between GRM entities all contribute to an 
environment conducive to organized crime and terrorists. Post 
and many other donors are focused on corruption and 
transparency issues, especially considering their linkage to 
transnational crime, alien smuggling, money laundering, and 
possible terrorist financing. The EC and others also express 
concern regarding weak security in ports and along the coast 
contributing to illegal fishing and export of precious 
hardwood timbers, both with severe environmental 
repercussions. 
 
HIV/AIDS: 
========= 
16. (U) Mozambique is at a critical stage in its efforts to 
stem the HIV/AIDS epidemic. In Southern Africa, Mozambique 
presents both the greatest challenges and possibly the 
greatest opportunity to become the next Uganda-like success 
in turning around the HIV/AIDS threat. The Mozambican 
Government (GRM) has been outspoken in the battle against 
HIV/AIDS and is a cooperative partner in our HIV/AIDS 
efforts. The USG has been a leading player in international 
HIV/AIDS efforts in Mozambique, working closely with our 
implementing partners, other donors, the Ministry of Health 
(MOH) and the National AIDS Council (NAC). Mozambique's 
overall HIV/AIDS prevalence rate is 14.9%, though prevalence 
rates vary greatly by region, with the highest rates 
occurring in the principal transportation corridors. The 
political environment in Mozambique is very favorable to 
accelerating ARV treatment throughout the country, though 
Mozambique's significant development challenges are a 
constraint for rapid scale-up of treatment activities. In 
addition to the Emergency Plan, funding has been committed 
through the Global Fund, the World Bank MAP and the Clinton 
Foundation (via several European donors) to strengthen the 
MOH and its services to expand ARVs. 
LA LIME